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15 Ekim 2024 Salı
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Finance Minister Chrystia Freeland says the government’s proposed changes to capital gains taxes tabled Monday are the “defining measure” of the parliamentary session, putting pressure on the Conservative Party ahead of a vote on the proposal.Proposed changes to the capital gains inclusion rate, first announced in the 2024 federal budget, have been billed as an effort to improve “tax fairness” in Canada and a bid to fund the Liberals’ planned spending on housing and other economic plans.“Today it is possible for a carpenter or a nurse to pay tax at a higher marginal rate than a multi-millionaire. That isn’t fair. That is why our government is raising the inclusion rate on annual capital gains above $250,000 for individuals,” Freeland said in a statement Monday.She added that this tax would help younger Canadians and spur housing construction.Story continues below advertisement 0:33Capital gains tax changes will help build more housing: Freeland“It will help fund our efforts to turbocharge the building of four million more homes. It will support investments in growth and productivity that will pay dividends for years to come,” she said.Capital gains are the proceeds from the sale of an asset like a stock or an investment property. Currently, all capital gains come with an inclusion rate of 50 per cent, meaning half of the profits realized from the sale are added to taxable income in that year.Under the Liberals’ proposed changes, that inclusion rate would rise to 67 per cent on any gains realized above $250,000 annually for individuals. That two-thirds inclusion rate would apply to all such gains made by corporations and many trusts. 1:55Contentious capital gains tax change to face vote at House of Commons MondayCanadians’ principal residences would remain exempt from capital gains taxes.Story continues below advertisementHow will the Conservatives respond?While the proposed hike to the inclusion rate was announced in the 2024 federal budget, the capital gains changes were stripped from the budget implementation bill to be tabled separately.Financial news and insights delivered to your email every Saturday.Get weekly money newsGet expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.Sign up for weekly money newsletterSign UpBy providing your email address, you have read and agree to Global News’ Terms and Conditions and Privacy Policy.Freeland was asked Monday whether she was attempting to create a wedge issue for Conservatives on the capital gains front.She defended the move as “ordinary practice” to introduce major tax changes as standalone bills, but added that Canadians should be scrutinizing how parties vote on the motion.“I do think this is a moment when Canadians should be watching closely what happens in the House and watching closely to see how all MPs vote on this, I would say, defining measure,” Freeland said. 1:13Poilievre says he supports Trudeau ‘paying more tax on his trust fund’Though the Conservative Party has not indicated how it will be voting on the proposal, leader Pierre Poilievre has been vocal about his objection to the capital gains tax change and proposed 2024 budget.Story continues below advertisementPoilievre called Prime Minister Justin Trudeau a fiscal “pyromaniac” in the House of Commons after the budget was tabled in April, accusing the Liberals’ “wasteful” budget of stoking the flames of inflation.The NDP have indicated they will support the proposed changes to capital gains taxes.Freeland said in question period on Monday that a vote on the capital gains motion would come on Tuesday.“The Conservative leader is fond of making inflammatory statements,” she said.“But he is silent on one issue, and that is tax fairness. Tomorrow, he’s not going to be able to dither anymore. Every single Conservative is going to have to take a stand. We’ll see what they really believe.”The motion tabled Monday allows the capital gains tax changes to take effect on the initially planned date of June 25 regardless of whether formal legislation is passed.Capital gains changes face backlashTrending NowSimone Biles says ‘weird’ crowd affected Olympic final after falling on beamSearch suspended for missing family of 4 after boat sinks off Alaska coastThe Liberals have claimed that the measure will affect only a slim minority of Canadians, estimated at 40,000 people per year, and primarily the most wealthy.Story continues below advertisementCanadians for Tax Fairness, a group of progressive economists and policy advocates, said Monday the change to the capital gains taxes is “a long-overdue step towards tax fairness” in Canada.“The tax break on capital gains is grossly unfair for a vast majority of Canadians who depend on their wages to build a life,” said Katrina Miller, the group’s executive director.“This is about everyone paying their fair share back into the communities we all live in,” she said.More on PoliticsWho is Tim Walz? What to know about Kamala Harris’s running mateOttawa to give an update on the Canadian Dental Care PlanTim Walz: Kamala Harris taps Minnesota governor as VP pickConservatives demand government explain how terror suspects immigrated to CanadaSome business leaders and other critics have said the move will have consequences beyond a few individual Canadians’ tax bills.The Canadian Federation of Independent Business (CFIB) said more than half small business owners in Canada fear this will affect them adversely.“The government has claimed the rate change would only affect a tiny percentage of the wealthiest Canadians, but more than half (55 per cent) of small business owners believe it will affect the eventual sale of their business, 45 per cent say it will affect the investments they hold privately, and 41 per cent say it will affect investments in their incorporated businesses,” CFIB said in a statement Monday.However, it added that 59 per cent thought the increase of the lifetime capital gains exemption to $1.25 million, up from just over $1 million previously, will be helpful to them. Entrepreneurs would also be able to claim a reduced inclusion rate of 33 per cent on capital gains up to $2 million over their lifetime, according to the budget.Story continues below advertisementDoctors, lawyers and other professionals have objected to the capital gains tax change since it was announced, saying their ability to retire and take time off is contingent on profits made from their practices.The Canadian Medical Association said in a statement Sunday that it is “deeply disappointed” in Freeland’s announcement that the federal government plans to proceed with the tax change. It warned the change will “add undue pressure and financial strain on physicians, undermining the stability of our health-care system.” 1:19‘It’s absolutely right’: Freeland addresses capital gains tax adjustment concerns Freeland on Sunday defended the capital gains changes as a way to fund other investments in the budget in a “fiscally responsible way.” She pointed to the Bank of Canada’s decision to cut its benchmark interest rate last week as proof the federal government was not fuelling inflation by spending beyond its means.Story continues below advertisementBut Benjamin Bergen, president of the Council of Canadian Innovators, told Global News on Sunday that the central bank’s rate cut is more a sign that Canada’s economy is struggling and needs a boost.The proposed changes to capital gains taxes are an “ill-baked idea” that will hamper growth outlook by discouraging Canadians to start and invest in their businesses, he argued. He said that CCI members have already told him that investors are wary of putting more capital into Canadian firms based on the proposed changes in the budget two months ago.“All of them indicate that this is something that will make it more difficult for us to be able to grow, create opportunity and ultimately prosperity to pay for the social programs we care about,” Bergen said.— with files from Global News’ Naomi Barghiel, David Baxter and David Akin